Aboitiz Power income dips 20% to ₱17.3 billion in 2019

Published March 21, 2020, 10:00 PM By Myrna M. Velasco
https://business.mb.com.ph/2020/03/21/aboitiz-power-income-dips-20-to-%e2%82%b117-3-billion-in-2019/

Listed firm Aboitiz Power Corporation ended 2019 with a relatively weaker financial outcome, with its net income dropping by 20-percent to ₱17.3 billion from the previous year’s rosier ₱21.7 billion profit level.

On a full year basis, the company said it registered non-recurring gains of ₱702 million, which is manifestly a turnaround from substantial losses of ₱2.1 billion in 2018, and such was attributed to “net foreign exchange gains from the revaluation of dollar-denominated debts and derivatives.”

At the same time, its Aseagas venture posted value added tax (VAT) recoveries and gains on land appraisal, hence, prompting the company to declare that “without these off-off gains, the company’s core net income for 2019 was ₱16.6 billion,” which should have been down by 30-percent vis-à-vis ₱23.8 billion profit in 2018.

In the fourth quarter of 2019 alone, the company reported that there was 23-percent decline in consolidated net income to ₱3.9 billion versus year-ago level of ₱5.0 billion.

Aboitiz Power said its recognized “non-recurring gains of ₱922 million” in the last quarter, thereby propping its income for that period. That essentially reversed the ₱361 million non-recurring loss it posted within the same period in 2018.

“Without these one-off gains, core net income for the fourth quarter of 2019 was ₱2.9 billion, 45-percent lower year-on-year,” the company has expounded.
Aboitiz Power President and Chief Executive Officer Emmanuel V. Rubio said “while market conditions had an effect on our 2019 financial result, we acknowledge that it was primarily driven by operational issues.”

The firm cited the main factors that twinged financial upshot last year included “lower earnings before interest, tax, depreciation and amortization (EBITDA), as well as increased interest and depreciation expenses.”

It further explained that “interest expense increased due to the bonds issued by the company in October 2019 and the recognition of interest expense from Therma Visayas Inc and Hedcor Bukidnon, Inc.” – which basically are the corporate vehicles of the company’s two new power projects that recently reached commercial operations.

“Depreciation and amortization also increased due to the take up of Hedcor Bukidnon and TVI’s new plants,” the Aboitiz firm emphasized.

On its power generation business portfolio, the company said it was pained by power plant outages it experienced last year, and that was compounded by its higher-cost procurement of replacement power, thus, its EBITDA for this segment had been leaner by 16-percent to ₱36.2 billion from a heftier ₱43 billion in 2018.